In my experience of mentoring, investing in, fundraising for, working with and for tech startups (probably 200 or so in total), here are 30 mistakes that I see repeated all the time.
While it’s famously hard to learn from other people’s experiences, it saves an awful lot of teeth gnashing if you can. It’s also just as difficult to figure out if any of these apply to you, which is why you should have a generous smattering of independent mentors or advisors to point out the truth (see Mistake 18).
1. Not understanding the profound implications of exponential growth and what it will do to your company and market
2. Not thinking big enough
3. Thinking that because it can be built, people will get value out of it
4. Not executing fast enough – it’s a race. Speed is the most important asset a startup has
5. Not being ruthlessly focused on the core proposition. Don’t even think about adding new products unless you need to pivot
6. Not hiring – and then firing – quickly enough
7. Not developing a self-critical culture
8. Believing that signing the big deal leads to big money – you’d be surprised how often a silver bullet turns out to be a misfire
9. Not ruthlessly eliminating their speed bumps
10. Getting too greedy. Leave something on the table in your negotiations and build longterm partnerships
11. Not admitting what you don’t do
12. Being afraid of saying “no” to clients if it’s not in your interest and focus
13. Not understanding the importance of being nice – people need to like you to work with you
14. Being in denial about bad news and information
15. Mismanaging their Boards, especially around hiding critical information or simply treating them as sales pitches. Be open and honest
16. Fudging – say “Yes, by [delivery date]” or “No”
17. Worrying too much about the competition
18. Not having enough and/or quality mentors, advisors, non-execs
19. Not investing enough time in recruiting (Tip: recruit people you like, listen to your gut and never employ someone that implies they’re doing you a favour to deign to work with you)
20. Not investing enough time in building a culture
21. Thinking that a person is as vital to the company as much as you (or they) think
22. Believing that just because you raise a seed round, Series A will follow – actually the odds are still massively against this happening. Ditto Series B, once Series A is raised. It’s not a right. It has to be earned.
23. Thinking that raising funds is the goal, not the means of building a bigger company more quickly
24. Believing that funding can be raised in a few months – allow at least six
25. Treating work like it’s “just another job” – it requires massive effort and almost certainly, long hours of grind. It’s not party-night every night, or even every weekend and it’s not 9 to 5
26. Thinking they can build a business “on the side” while working in their day job(s)
27. Not raising enough money to allow demonstrable progress before the next round – allow 18 months runway
28. Believing their own PR
29. Not understanding how VC investing works
30. Not acknowledging when founding team members need to be replaced (if they do)
I’m sure there are others that you can think of, but these were the first ones that sprung to mind in a quick brainstorm and they’re common enough that I see a pattern across many companies – even very successful ones.
Please leave a comment if you have any more, from your own experience.
Maybe I could use these as chapter headings for my next book!